Skip to content
×
PRO
Pro Members Get Full Access!
Get off the sidelines and take action in real estate investing with BiggerPockets Pro. Our comprehensive suite of tools and resources minimize mistakes, support informed decisions, and propel you to success.
Advanced networking features
Market and Deal Finder tools
Property analysis calculators
Landlord Command Center
$0
TODAY
$69.00/month when billed monthly.
$32.50/month when billed annually.
7 day free trial. Cancel anytime
Already a Pro Member? Sign in here

Join Over 3 Million Real Estate Investors

Create a free BiggerPockets account to comment, participate, and connect with over 3 million real estate investors.
Use your real name
By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions.
The community here is like my own little personal real estate army that I can depend upon to help me through ANY problems I come across.
Buying & Selling Real Estate
All Forum Categories
Followed Discussions
Followed Categories
Followed People
Followed Locations
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback

Updated over 2 years ago,

User Stats

21
Posts
12
Votes
Sung Yu
  • Rental Property Investor
  • Atlanta, GA
12
Votes |
21
Posts

To hold or sell (4-plex) 1.5yr ownership

Sung Yu
  • Rental Property Investor
  • Atlanta, GA
Posted

Hello BP family, I currently own a fourplex in Lacey, Washington and I am looking for advice on whether to hold or sell. Here's a breakdown that may help paint the picture, thanks in advance! 

Short term goals: Accumulate 200k in cash ASAP 

Long term goal: 15k cash flow 

Numbers:

  • -Bought in October 2020; VA loan; 2.75% (2.94% APR); $6.5k in closing cost
  • -Purchase Price: $685k; after funding fee total loan: $701k; currently outstanding loan: $679k
  • -Since then, increased total rent from $4,200 to $5,160
  • -Operating expense: $1,650 (using $200 for routine repairs/maintenance cost)
  • -NOI: $3,312 (using 4% for vacancy)
  • -Mortgage (P+I): $2,861; Total mortgage payment: $3,505
  • -Total monthly expenses: $4,967 (using 5% for cap ex…which is conservative as opposed to 10%)
  • -Monthly cash flow: $193
  • -Annual cash flow: $2,313

Reasons to hold: 

  • -It is a stable, generally stress-free property. 3 of 4 units have been great long term tenants
  • -Low interest rate at 2.75%
  • -It is in a reliable area that will steadily appreciate  
  • -I don’t necessarily need the capital right now. In another words, I don’t have a solid plan on how exactly I’m going to deploy the proceeds.
  • -I am comfortable with where this property lies between the appreciation vs cash flow scale…currently breaking even and starting to see a small cash flow.

Reasons to sell:       

  • -Take the gains and reinvest (~100k) 
  • -I can avoid paying capital gains on the proceeds entirely due to tax-free income (military deployment 2022) 
  • -It will free up all my VA loan entitlement allowing me to purchase a house hack at the next duty station
  • -Protection in case there is a market correction.
  • In my mind, the question comes down to whether building my immediate cash is more important than what the fourplex has to offer... Please let me know if there's anything else I should consider. 

Loading replies...